Halifax Offers More Mortgage-Holders Compensation for Information Shortfall

This means that hundreds of thousands of mortgage-holders could be in line for compensation payments of up to £4,500. The first indications that something was amiss occurred in February, when Halifax revealed it was writing to 600,000 mortgage-holders to inform them they could be eligible for compensation, since they might not have been told about changes to the way their mortgage repayments were being calculated. This week Halifax was forced to admit that an additional 250,000 customers may also not have been told about the changes. A spokesman explained: “In February 2011, we agreed a voluntary agreement with the FSA in relation to a customer contact and goodwill payment programme with specific Halifax mortgage customers.” “We have subsequently identified a further group of customers that are eligible for inclusion within the programme. We are now in the process of writing to these borrowers explaining what this means for them.” Of the original 600,000 mortgage-holders that were contacted, around half have been compensated, either by receiving a flat sum or 1 per cent of their mortgage balance for every year they were misinformed. It is likely that a similar proportion of the new group will be in line for compensation, the spokesman said. The watchdog Financial Services Authority expressed concern that some borrowers may have been misled by the wording of their mortgage offer document into thinking that Halifax would inform them about any changes, such as the cap on mortgage interest rates especially at a time when interest rates were changing rapidly.

Published on 16 November 2011

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